Technology

Is Vanguard Small-Cap Growth Index Admiral (VSGAX) a Strong Mutual Fund Pick Right Now?

Any investors who are searching for Index funds should take a look at Vanguard Small-Cap Growth Index Admiral (VSGAX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

History of Fund/Manager

Vanguard Group is responsible for VSGAX, and the company is based out of Malvern, PA. Since Vanguard Small-Cap Growth Index Admiral made its debut in September of 2011, VSGAX has garnered more than $11.79 billion in assets. The fund is currently managed by Gerard C. O'Reilly who has been in charge of the fund since September of 2011.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.75%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.28%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VSGAX's standard deviation over the past three years is 16.08% compared to the category average of 8.83%. The standard deviation of the fund over the past 5 years is 15.07% compared to the category average of 9.29%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VSGAX has a 5-year beta of 1.12, which means it is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VSGAX's 5-year performance has produced a negative alpha of -1.76, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.

The mutual fund currently has 84.16% of its holdings in stocks, with an average market capitalization of $5.72 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Other
  3. Finance
  4. Health
  5. Industrial Cyclical

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VSGAX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 0.86%. Looking at the fund from a cost perspective, VSGAX is actually cheaper than its peers.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.

Bottom Line

Want even more information about VSGAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.